Quality micro-cap stocks with strong prospects are finding favour among portfolio managers. Though micro-cap stocks carry very high risk, they have the potential to deliver high returns
Micro-cap stocks carry very high risk, but also have the potential to deliver high returns. Fund managers apply various parameters to choose micro-cap stocks that have the potential to outperform over the long term
Mutual funds’ search for higher returns has taken them deep into the micro-cap zone, backed by a rise in the inflows and prices of these stocks. But a micro-cap-focused fund should ideally not be your first investment. A measured and careful exposure is fine, though.
A high-risk, high-return strategy, microcap stocks are those whose market-capitalisation falls below Rs 3,000 crore. If picked with care and backed by good research, these stocks can give a big kicker in returns. And market correction presents a good opportunity to do quality picking.